1. OVBE AssignmentTASMAC
Apr 16, 2010
Ethical Issues in Corporate Governance
Vivekanandan M
Presented by…..
Date: Slide No: 1Vivekanandan M

2. OVBE AssignmentTASMAC
Apr 16, 2010
Ethical Issues in Corporate Governance
Introduction to Corporate Governance
Team MemberDate: Slide No: 2
Three models of Management
Ethical views in Corporate Governance
Shareholder Activism
Dilemmas and contradiction in Corporate Governance
Introduction to Galleon Scam
Ethical issues in Corporate Governance of Galleon
Conclusion

3. OVBE AssignmentTASMAC
Apr 16, 2010
Ethical Issues in Corporate Governance
Date: Slide No: 3Vivekanandan M
Introduction to Corporate Governance
 Corporate governance is defined as a system to govern the way in
which business is directed, administered and controlled.
 SEBI (Securities Exchange Board of India) has come with the
standards for Corporate governance for financial failure.
 CII (Confederation of Indian Industries) has come with the standards
for Corporate Governance focusing on transparency and governance.
 Ministry of Corporate Affairs, Government of India has set up NFGC
(National Foundation for Corporate Governance) in making India the
best in Corporate Governance.

4. OVBE AssignmentTASMAC
Apr 16, 2010
Ethical Issues in Corporate Governance
Date: Slide No: 4Vivekanandan M
Three models of Management
Immoral
management
Moral
management
Amoral
management
Oppose what is
ethical
Conforms to high
standardof ethical
behavior
Casual or careless
about ethical
considerations

5. OVBE AssignmentTASMAC
Apr 16, 2010
Ethical Issues in Corporate Governance
Date: Slide No: 5Vivekanandan M
Ethical views in Corporate Governance
 Unitarian view – morality and ethics are related to business.
 Separatist view – business is to generate profits and morality and
ethics do not form a part of business.
 Integration view – Ethical behavior and business are integrated.
External forces like government, business market and law will guide
ethical behavior of business.

6. OVBE AssignmentTASMAC
Apr 16, 2010
Ethical Issues in Corporate Governance
Date: Slide No: 6Vivekanandan M
 Shareholder activism is the way in which shareholders assert their
powers as owners of company to influence company behavior.
 In Unitarian view, shareholder activism against immoral and amoral
management is ethical.
 In Separatist view – Immoral and Amoral management are ethical,
as they work towards profit generation.
 In Integration view, shareholder activism against immoral and amoral
management is ethical.
Shareholder Activism

7. OVBE AssignmentTASMAC
Apr 16, 2010
Ethical Issues in Corporate Governance
Date: Slide No: 7Vivekanandan M
Eg: The objective of any business is to make and supply goods or
services to customers, which will lead to prosperity of the economy.
Business which make goods like – alcohol, cigarettes, etc.. are ethical
dilemma for business, as society sees these products as goods that
are not good for the society.
The contradiction is, these companies offer employment opportunities
to many people in the society.
Dilemmas and Contradiction in Corporate Governance

8. OVBE AssignmentTASMAC
Apr 16, 2010
Ethical Issues in Corporate Governance
Date: Slide No: 8Vivekanandan M
 Galleon is a hedge fund, which involved in insider trading.
 The amount involved in the scam is over billion dollar.
 Galleon CEO, Mr. Raj Rajarathanam was charge sheet by FBI on
Oct 16, 2009.
 Galleon got tips from credit rating firms and other hedge funds like –
Intel Capital, IMB, McKinsey.
Introduction to Galleon Scam

9. OVBE AssignmentTASMAC
Apr 16, 2010
Ethical Issues in Corporate Governance
Date: Slide No: 9Vivekanandan M
 Galleon management followed immoral management style.
 Their main objective was profit generation.
 Their strategy was to exploit opportunity.
Ethical Issues in Corporate Governance of Galleon Scam

10. OVBE AssignmentTASMAC
Apr 16, 2010
Ethical Issues in Corporate Governance
Date: Slide No: 10Vivekanandan M
Corporate can introduce a new role Chief Ethical Officer, who will look
into the code of ethics followed by every group in the organization.
Periodic internal audit to ensure all the group are in compliance with
the standard.
Periodic training to all employees.
Conclusion

11. OVBE AssignmentTASMAC
Apr 16, 2010
Ethical Issues in Corporate Governance
Thank You!
Team MemberDate: Slide No: 11